A GLOBAL financier has frozen funding for several multi-million-dollar Sydney property developments, allegedly leaving them in a perilous state and in danger of physically collapsing.
Citadel Property Group claims Capital Finance Australia Limited approved a $98 million funding facility for three projects, but stopped funding last year after paying $31 million.
They include a shopping centre and 161 apartments at Berala, 6000sqm of commercial retail with 100 apartments at Liverpool and 54 apartments at Rockdale.
And thousands of other construction projects have been deferred as a result of the global credit crisis.
Anchors holding up the partly-built properties at Berala, Liverpool and Rockdale are reaching the end of their lifespan, threatening to destabilise the structures.
A source close to the projects said the Berala site was particularly worrying and $1 million was urgently needed to shore up the basement for public safety.
It is understood Capital appointed receivers for the three projects a month ago.
Citadel is now suing Capital in the Supreme Court, alleging breach of contract.
Related Coverage"Citadel had an approved facility of around $100 million and Capital Finance Australia has now frozen that facility," Daniel Salim, of Salim Rutherford Lawyers, said.
"This matter is now before the Supreme Court."
The Sunday Telegraph understands subcontractors on the sites have not been paid and have taken legal action against Citadel, which is trying to sell assets to meet its commitments.
Gadens Lawyers, acting for Capital, declined to comment. The matter is listed for November 12.
Reed Construction Data chief executive Rob Wild said project deferrals had increased five-fold.
This year, 5048 projects have been deferred, compared with 1052 for the first 10 months of last year. More than half are in NSW.
Mr Wild said most of these deferrals had been in the commercial and apartment sectors.
"What we expect out of all this is that there'll be downward pressure on prices," he said.
"As there's less work around, builders are going to be pricing keener and they're going to put more pressure on their subcontractors and suppliers to price keener."
Master Builders Association chief economist Peter Jones said the construction industry was suffering a loss of confidence and developers were finding it harder to access finance.
"Certainly there's suggestion the credit situation is choking off projects," he said.
